In its monthly labor report released on Friday, the Bureau of Labor Statistics revealed that the United States generated a mere 74,000 jobs in December—a disappointing number for economists who optimistically expected an 196,000. On the other hand, though economists were anticipating the unemployment rate to hold steady at 7 percent, it fell to 6.7 percent, the lowest it has been since October 2008. The drop, however, was not due to more opportunities in the workforce, but to the lowest Labor Force Participation Rate since 1978. It is the result of the combination of the composition of the American labor force and the continued pressing challenge of long-term unemployment. The contradiction between the employment rate and job numbers indicates the need for Congress to extend unemployment insurance.
The LFPR, which includes both the employed and the unemployed who are actively seeking work, now stands at an alarming 62.8 percent. The American labor force has seen such a decline due to the retirement of the Baby Boomers, who will account for roughly two-thirds of the decline in the LFPR by 2020. Unable to find job prospects without experience, younger workers are not entering the workforce at a similar rate. Due to the expiration of the Emergency Unemployment Compensation program at the end of 2013, 1.5 million Americans have lost benefits and 72,000 continue to lose theirs each week. Congress has ignored the harm of cutting these benefits for Americans in search of work, since, once they are cut off from this minimal financial support of unemployment benefits, their chances of successfully seeking work significantly declines.
Nearly 38 percent of unemployed Americans have been without work for six months or longer—a troubling issue that requires immediate action. Unreasonable partisanship within Congress has prevented the necessary reform of unemployment benefits and insurance. Conservatives insist any increase in unemployment benefits will lead to significant cuts in other areas of the federal government’s budget, but Democrats have taken the initiative to accommodate for this demand by proposing that Medicare continue its 2 percent cut for an extra year. Yet, Republicans still shot down both bills proposed by Democrats in the Senate.
Republicans claim that there is not enough being done in job creation and too much being done to reduce poverty. “Every American has a right to ask the question ‘Where are the jobs?’” says House Speaker John Boehner. It’s astonishing that their ideals state that it is even possible to find a job without a dime in one’s pocket. Unemployment insurance should be one of the last forms of stimuli to go into the economy, as it is a critical lifeline for Americans who have fallen victim to current poor economic conditions and cannot find work despite extended searches.
Nuts!